My New Year’s resolutions will likely be broken early and often in 2016. My consequences are mostly non-monetary: a few more pounds, a little less savings, and not winning the triathlon in my age group. Your consequences, as a HIPAA-covered entity or business associate, for not complying with the Privacy and Security Rules could be much greater, and could put you into serious debt to the HHS Office of Civil Rights (OCR). Therefore, we propose that you resolve now to become fully HIPAA compliant in 2016.

OCR delivered an early holiday gift, wrapped in the Director’s Sept. 23, 2015, report to the Office of Inspector General. In that report, she disclosed that OCR will launch Phase 2 of its HIPAA audit program in early 2016, focusing on noncompliance issues for both covered entities and business associates.

So, grab that cup of hot cocoa and peruse this review of 2014-2015 HIPAA enforcement actions, which should help identify noncompliance issues on which OCR will focus in 2016. 

Security Risk Assessment

  • Triple-S Management Corporation (11/30/2015): After receiving five breach notices from Triple-S from November 2000 through March 2015, OCR investigated and alleged widespread violations, including failure to implement appropriate administrative, physical and technical safeguards; failure to use minimum necessary PHI, failure to conduct a thorough risk analysis of all IT equipment and data systems; failure to implement security measures sufficient to reduce risks and vulnerabilities to ePHI; failure to implement procedures for terminating access by separated employees; and impermissible disclosures to vendors of ePHI without business associate agreements.

Result: $3,500,000 settlement and three-year Corrective Action Plan (CAP).

Device Encryption & Controls

  • Cancer Care Group, P.C. (8/31/2015): CCG reported a breach of unsecured ePHI when a laptop, with ePHI of approximately 55,000 individuals, was left in an employee’s car and was stolen. OCR investigated and alleged failure to implement polices/ procedures governing receipt and removal from the facility of hardware and electronic media containing ePHI.

Result: $750,000 settlement and three-year CAP.

  • Concentra Health Services (4/22/2014): The ePHI of an undetermined number of individuals was in an unencrypted laptop stolen from a physical therapy facility. Concentra reported the breach. In response, OCR investigated and alleged that Concentra failed to implement necessary policies and procedures or remediation efforts to address threats and vulnerabilities identified in its routine security risk assessments.

Result: $1,725,220 settlement and two-year CAP.

QCA Health Plan, Inc. (4/22/2014): 148 individuals’ ePHI was left on an unencrypted laptop, which was stolen from a workforce member’s car. QCA reported the breach, and OCR conducted an investigation and alleged that QCA failed to implement necessary policies and procedures or to conduct a security risk analysis.

Result: $250,000 settlement and two-year CAP.

Data Access Controls

  • New York-Presbyterian Hospital & Trustees of Columbia University (5/7/2014): The ePHI of 6,800 individuals was inadvertently made accessible through Internet search engines after a Columbia physician, who developed applications for both NYP and Columbia, attempted to deactivate a personally-owned computer server from a hospital network containing ePHI. After the breach was reported, OCR investigated and alleged that neither NYP nor Columbia had conducted a security risk assessment or complied with their own data security policies and procedures.

Result: $3,300,000 settlement by NYP, $1,500,000 settlement by Columbia, three-year CAPs.

  • Skagit County, Washington (3/7/2014): 1,581 individuals’ ePHI was inadvertently moved to a publicly accessible server maintained by the county. In response to the breach report, OCR conducted an investigation and alleged widespread non-compliance with the HIPAA privacy, security, and breach notification rules.

Result: $215,000 settlement and three-year CAP.

Malware Protection

  •  Anchorage Community Mental Health Services, Inc. (12/2/2014): The ePHI of 2,743 individuals was inadvertently disclosed due to malware that compromised security of the covered entity’s information technology systems. After the breach was reported, OCR investigated and alleged that ACMHS failed to conduct a security risk assessment or implement necessary patches and upgrades to its information technology systems.

Result: $150,000 settlement and two-year CAP.

File-Sharing Applications

  • Elizabeth’s Medical Center (6/10/2015): OCR received a complaint about workforce members using an Internet-based file sharing application to store documents containing the ePHI of at least 498 individuals. OCR investigated and found that SEMC failed to timely identify and respond to a known security incident, mitigate harmful effects of the security incident, or document the security incident and its outcome. Separately, SEMC submitted notification to OCR of a breach of unsecured ePHI stored on a former SEMC workforce member’s personal laptop and USB flash drive, affecting 595 individuals.

Result: $218,400 settlement and one-year CAP.

Social Engineering

  • University of Washington Medicine (12/14/2015): An employee opened a phishing email attachment, releasing malware that compromised approximately 90,000 patients’ ePHI in the organization’s IT system, including Social Security numbers and insurance ID cards. After UWM reported the breach, OCR investigated and alleged that, though UWM’s security policies required affiliates and partners to have up-to-date, documented system-level risk assessments and to implement safeguards, UWM did not ensure its affiliates were properly conducting their risk assessments and responding to risk and vulnerabilities.

Result: $750,000 settlement and two-year CAP.

Physical Security

  • Lahey Hospital and Medical Center (11/24/2015): A laptop with ePHI of 599 individuals, attached to a portable CT scanner, was stolen from an unlocked room during overnight hours. After Lahey notified OCR of the breach, OCR investigated and alleged failure to conduct a thorough risk assessment for all ePHI, failure to physically safeguard workstation with ePHI, failure to implement unique user names to identify and track users, and failure to document workstation activity.

Result: $850,000 settlement and three-year CAP.

So, what lessons can we learn from these HIPAA enforcement actions, totaling more than $13 million in settlement payments, to avoid your organization going into OCR debt in 2016?

  1. OCR enforcement is on the rise, and penalties for HIPAA violations are high and likely will remain high.
  2. OCR indicates it will focus on covered entities with patterns of violations, and while larger entities are often in the cross-hairs, smaller organizations are also at risk.
  3. Investigations continue to be triggered by the mandatory breach notifications to OCR.
  4. Almost every settlement agreement emphasizes the duty to conduct, and continuously update, an enterprise-wide risk assessment for ePHI, both internally and externally, and owned or controlled by the covered entity,
  5. Corrective Action Plans increasingly bind individual officers and hold them accountable for compliance with HIPAA, as seen in the recent Cancer Care and Lahey Hospital settlements.
  6. OCR is holding covered entities responsible for the annual assessment of risks and vulnerabilities to ePHI of their wholly owned subsidiaries who are business associates, as done in the recent Triple-S Management and University of Washington Medicine matters.

But wait – one more lesson. Remember that you must also safeguard PHI in paper records! Cornell Prescription Pharmacy learned this the hard way in April 2015, after OCR discovered through local Denver news reporting that Cornell disposed of unsecured documents containing PHI of 1,610 patients in an unlocked, open container on Cornell’s premises. Cornell settled for $125,000 and a two-year Corrective Action Plan, a less painful result than the $800,000 settlement in 2014 by Parkview Health System for unsecure handling of paper patient medical records.

We hope these lessons contribute to a successful, HIPAA-compliant new year for all. If you address such security issues now, your organization will be in your debt … obviously better than being in serious debt to OCR.